📢 Earnings Summary — WMT

Walmart delivered another strong quarter with broad-based sales and profit growth, powered by robust e-commerce, advertising, and membership income. The company gained market share across key categories and cohorts, while accelerating delivery speeds and scaling automation to reduce costs. International remained a standout, with Flipkart and China driving double-digit growth, and Sam’s Club showed healthy comps and digital engagement. Management raised full-year sales and operating income guidance and highlighted a resilient omnichannel model and diversified profit streams. While tariffs, mix, and international pricing actions pose margin headwinds, the tone was confident, supported by cash flow strength and continued investment in AI and automation. Leadership transition to John Furner as CEO in early 2026 underscores continuity of strategy and execution.

📈 Growth Highlights

• Consolidated revenue up ~6% y/y in constant currency (~$10B increase); adjusted operating income up 8% y/y
• Global e-commerce sales +27% y/y; each segment grew e-commerce >20%
• Walmart U.S. comp sales +4.5% with positive traffic in stores and online; e-commerce +28% (7th straight quarter >20%)
• International sales +11% y/y in constant currency; adjusted operating income +~17%
• Sam’s Club U.S. comp ex-fuel +3.8%; e-commerce +22%
• Global advertising revenue +53% (Walmart Connect U.S. ex-VIZIO +33%; International +34%); membership income +17% globally

🔨 Business Development

• Leadership transition announced: John Furner to become President & CEO of Walmart Inc. effective Feb 1, 2026
• Partnership with OpenAI: enabling Walmart and Sam’s purchases directly through ChatGPT; rollout starts with checkout and will deepen over time
• Expanded Walmart+ and membership benefits, including One Pay Cash Rewards credit card and expanded streaming services
• Sam’s Club U.S. made curbside pickup free for all members; accelerated delivery via Spark driver platform
• Ongoing expansion of Sam’s Club footprint and pipeline in China (now 60 clubs); continued marketplace growth in Walmart U.S. (+17%)

💵 Financial Performance

• Adjusted operating income +8% y/y in constant currency; grew faster than sales across all segments
• Adjusted EPS up nearly 7% to $0.62
• Gross profit rate roughly flat; Walmart U.S. +19 bps on inventory discipline and mix, offset by International channel/format mix and price investments (e.g., Mexico) and Flipkart BBD timing
• Adjusted SG&A leveraged slightly; technology and AI supporting efficiency gains
• Advertising + membership represented ~1/3 of consolidated adjusted operating income this quarter
• Enterprise membership income +17% (International +34%, driven by Sam’s China; Walmart+ double-digit growth; Sam’s U.S. +7%)
• Inventory +~3% y/y (Walmart U.S. +2.6%) despite higher tariff costs
• GAAP results include ~$700M noncash charge at PhonePe (share-based comp) in contemplation of a potential IPO
• ROI (LTM) down slightly due to PhonePe charge; underlying ROI improving

🏦 Capital & Funding

• Year-to-date operating cash flow $27B, up $4.5B y/y
• Returned nearly $13B to shareholders YTD via dividends and share repurchases
• Capital discipline emphasized; improved working capital efficiency via larger 3P marketplace mix
• PhonePe: discrete noncash SBC charge (~$700M) tied to potential IPO preparation

🧠 Operations & Strategy

• Omnichannel model scaling: ~35% of U.S. store-fulfilled digital orders delivered in under 3 hours; expedited-channel sales +~70%
• Supply chain automation: >60% of U.S. stores receiving some freight from automated DCs; >50% of e-commerce FC volume automated, lowering cost-to-serve
• AI deployment across the enterprise (software development >40% AI-generated/assisted code; ChatGPT Enterprise licenses; certifications) to personalize experiences and improve efficiency
• Pricing/value actions: ~7,400 active rollbacks in Walmart U.S. (over half in grocery); >2,000 rollbacks converted to new EDLP since the start of the year; sub-$40 Thanksgiving meal for 10
• Customer mix: continued growth from higher-income households; middle income steady; value focus for lower-income customers
• International digital penetration high (China e-commerce ~50% of sales; ~80% of orders delivered in <1 hour); Flipkart’s BBD drove record engagement (peak 87 orders/sec)

🌍 Market Outlook

• Raised FY guidance: constant-currency sales growth 4.8%–5.1% (prior 3.75%–4.75%); FY operating income growth 4.8%–5.5% CC
• Q4 guidance: constant-currency sales growth 3.75%–4.75%; operating income growth 8%–11%
• FX tailwind: if current rates hold, expected ~$1.1B benefit to reported Q4 sales
• Management reiterates ‘playing offense’ strategy to gain share and grow profit faster than sales
• Ongoing share gains in grocery, health & wellness, and general merchandise; fashion cited as a bright spot

⚠ Risks & Headwinds

• Tariffs increasing cost of goods and inventory costs
• Category mix headwind in Walmart U.S. as grocery and health & wellness outpace general merchandise
• International margin pressure from channel/format mix (e.g., Flipkart event) and ongoing price investments (e.g., Mexico)
• Lower-income consumer under pressure; need to maintain aggressive value positioning
• Foreign exchange volatility could impact reported results
• One-time items (e.g., PhonePe SBC charge) affecting GAAP metrics and ROI optics

AI-generated earnings recap sourced from company results & conference call observations. Not investment advice — verify with official filings.